Zomato shares gain for second day after falling over 17% post-Q3 results

Zomato shares' steady gain day 2; succeeding the losses of Q3 results

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26 Aug, 2025 12:21

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Zomato Ltd shares gained for second straight day on January 23 after the shares fell over 17% post-Q3 results announcement on January 20.

At 11:05 am on January 23, Zomato shares were trading over 2% higher at Rs 221.1 apiece.

Zomato’s aggressive store expansion for its quick commerce arm, Blinkit has significantly inflated losses, impacting its Q3 net profit. Despite the stock’s decline post-Q3 results, brokerages maintain confidence in Zomato’s strong execution and long-term growth prospects.

Zomato's Q3 net profit for the December quarter fell by 57 percent, driven by margin pressures from increased spending on opening new centers to support Blinkit’s operations.

Nomura acknowledges the rising competition in the quick commerce sector but believes Blinkit is well-positioned to secure a top-two market position, citing its strong execution and solid balance sheet as key strengths.

Jefferies also remains optimistic about Blinkit’s execution, noting that Zomato’s aggressive expansion could encourage competitors to follow suit. While maintaining confidence in Blinkit’s growth, Jefferies has reduced its price target for Zomato by 7 percent to Rs 255, keeping a 'hold' rating due to the sharp decline in the company’s bottom line.

Bernstein continues to support Zomato’s expansion strategy, particularly Blinkit's rapid dark store addition, maintaining an ‘outperform’ rating with a revised target of Rs 310. The brokerage attributes the recent stock correction to concerns over heightened competition in quick commerce.

Nuvama Institutional Equities echoes these positive views, highlighting Blinkit’s faster-than-expected growth driven by its expanding dark store network.

Zomato reported a 57 percent decline in profit for Q3, with consolidated net profit dropping to Rs 59 crore from Rs 138 crore a year ago, as margins were squeezed by increased spending to scale Blinkit’s operations.